Part 1: Market Structure and Competition in Australian
In 2020, the Australian Competition and Consumer Commission (ACCC) launched Federal Court proceedings against Australasian Food Group (AFG), which trades under Peters Ice Cream, alleging the company engaged in anti-competition behaviour between 2014 and 2019. It was alleged that Peters entered into an exclusive agreement with food delivery company PFD Food Services to distribute its single-wrapped ice cream and frozen confectionary products to petrol and convenience retailers nationally during this period. Peters also rejected requests made by PFD to distribute competing ice cream products to the same petrol and convenience retailers that sell Peters’ single-wrapped ice cream and frozen confectionary products.
1. Research and write up the background of this case study on ACCC’s position and AFG’s (also known as Peters Ice Cream) position in regard to this exclusive dealing in no more than 300 words.
2. Conduct an economic analysis on the ACCC’s concerns and rationale behind its decision to launch legal action against AFG (Peters Ice Cream). (Note: include market structure, competition policy, firm behaviour, consumer surplus, producer surplus, deadweight loss and market efficiency in your group’s discussion and analysis).
3. Identify and justify the type of market structure ACCC wants to promote for the single serve ice creams.
4. If AFG (Peters Ice Cream) purchased and merged with the other major supplier of single serve ice creams to become a dominant seller in the market of single serve ice creams, illustrate and explain using a diagram the impact this acquisition and merger has on price, quantity and deadweight loss as compared to the market structure identified in Q3 above.
Part 2: Australian Economic
1. Compare and contrast the following Australian economic indicators in six quarterly periods from March Quarter 2020 (almost before the COVID-19 pandemic) to June Quarter 2021:
CPI and GDP deflator
Reserve Bank of Australia’s official interest rate (cash rate)
2. Select three industries in Australia and analyse how the COVID-19 pandemic has affected their performance.
You must select at least one industry that experienced negative growth and at least one industry that experienced positive growth during this pandemic.
Justify the periods for comparing these three industries’ performance before and during the pandemic.
Your analysis should include but not limited to the theory of demand and supply in analysing the performance of your selected industries.
3. The Australian federal government implemented Job-Keeper subsidy to support businesses and employees who were facing severe economic impact at the onset of coronavirus pandemic. In the first phase of this federal government-funded Job Keeper scheme (30 March to 27 September 2020), eligible businesses and entities received $1,500 (before tax) per fortnight per employee to cover the cost of wages. During the extension phase of Job Keeper (28 September 2020 to 28 March 2021), this subsidy was reduced and targeted to those businesses that continued to be significantly affected by the economic downturn. After 28 March 2021, there have been requests made to the federal government by different economic sectors and groups to further extend and/or revive Job Keeper subsidy but the federal government rejected these requests.
Analyse the pros and cons of this JobKeeper subsidy to the Australian economy. Evaluate the economic rationale of the federal government in rejecting requests to further extend and/or revive JobKeeper subsidy after 28 March 2021.